TORONTO (miningweekly.com) – US diversified miner Cliffs Natural Resources on Wednesday suspended environmental assessment activities for its $3.3-billion chromite project in Ontario’s mineral-rich north, citing stalled negotiations and delays to the assessment process as among the reasons for its decision.

Cliffs and it subsidiary Cliffs Chromite Ontario, which was working to develop the Black Thor mine in the muskeg-like wastelands of the north – where no roads, reliable power or other infrastructure existed yet – said the decision to temporarily suspend development activities was the result of delays related to the environment assessment process, land surface rights and negotiations with the Ontario government, and not as a result of the bear market.

“We remain excited about this project and its potential for Cliffs and Northern Ontario; however, given the current unresolved issues, we cannot and will not unilaterally move the process forward and must manage our resources appropriately,” Cliffs global ferroalloys senior VP Bill Boor said.

Cliffs said before it could move forward with the Black Thor project, it had to receive provincial and federal environmental assessment approvals, negotiate mutually acceptable agreements with impacted First Nation communities, work with governments to address the lack of infrastructure in the Ring of Fire and complete its commercial and technical feasibility studies.

"In a practical sense, we've taken the environmental assessment and other project work as far as possible without resolution of these issues. Although we are temporarily suspending our environmental assessment activities, we will continue our work with the government of Ontario and First Nation communities and look forward to restarting the work on the environmental assessment when we are collectively ready to make this project a reality,” Boor added.

Talks on progressing the project and developing the Ring of Fire were put on hold when Ontario's new Premier Kathleen Wynne took office in January.

The federal Minister responsible for Federal Economic Development Organisation for Northern Ontario (FedNor) Tony Clement in an emailed statement to Mining Weekly Online said Cliffs' decision would not stall development of the Ring of Fire.

"This decision was made by a private company. Our Conservative government is focused on working with all stakeholders to ensure the potential of the Ring of Fire becomes a reality.

"We will continue to work with all levels of government, First Nations and other stakeholders to help maximise the economic opportunities for Northern Ontarians."

During the Prospectors and Developers Association of Canada's yearly convention, held in March, Clement pledged government’s full support to develop the remote Ring of Fire area, which was estimated to hold a resource of more than C$50-billion in minerals, as fast as possible.

“I can assure you that I am fully committed to working closely with these communities in the coming months and years, reaffirming our government’s commitment to collaborative and responsible resource development,” he told a gathering of journalists.

Ontario Minister of Northern Development and Mines Michael Gravelle also affirmed to Mining Weekly Online on Wednesday its conversations with Cliffs had been very "productive" and that the Ministry continued to have a close relationship with the company.

"Certainly, our Ring of Fire Secretariat continues to be fully engaged on all aspects. We will continue to work diligently to finalise many aspects of an arrangement that would bring this significant investment to Ontario.

"While Cliffs has notified the Ministry of the Environment that it plans to suspend its environmental assessment process, the company has not withdrawn its 'terms of reference', which is currently before the Ministry for review," Gravelle said.

He added the Ministry had also made significant progress working with First Nation communities and was currently developing a framework for a community-driven, regional negotiation process, of which Cliffs was supportive.

"We remain committed to ensuring that all aspects of this development progress in a socially and environmentally sustainable manner," Gravelle said.

In May 2012, Cliffs announced a C$3.3-billion investment to build the mine, a processing facility, a transportation corridor and a smelter in the Sudbury area.

The miner had hoped to be moving fast and to have all the permits and environmental assessment approvals in hand for the proposed mine by the end of 2013.

Cliffs saw its Black Thor chromite deposit, which it purchased for $240-million in 2010, as an opportunity to supply about 10% of the global chromite market. The giant openpit mine was expected to produce about 600 000 t of ferrochrome for consumption in the North American and European steel markets each year, as well as ship about a million tons of chromite concentrate into Asia.

Discovered almost by accident in 2002 by diamond major De Beers, which at the time was looking for diamonds, but instead found copper and zinc, the 5 000 km² Ring of Fire deposit, which is about 1 000 km north-west of Toronto, is one of the most promising mineral development opportunities in Ontario in almost a century.